Smartphones are outselling feature phones: a look at the opportunity in the Arab world

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As of Q2 2013, smartphone sales now account for 51.8% of mobile
phone sales globally, according to tech research firm Gartner.

Here’s a breakdown: Samsung dominates the market, with a 31.7%
share, followed by Apple (14.2%), LG (5.1%), Lenovo (4.7%), and ZTE
(4.3%).

Android also continues to own the market, now at 79.2%, up from
64.2% last year. Next come Apple (14.2%), and Windows (3.3%),
which, has overtaken Blackberry since the same period last year
(now at 2.7%).

What Blackberry failed to take into account, of course, is what
makes Android so popular: the rise of low-cost smartphones. As a
free, open source platform, Android can be used on any smartphone,
whether it costs a
diamond encrusted $115,000 or
$50 on the Indian market.

As BRIC smartphone use skyrockets, the Arab world is also enticing
a few players; in a bid to climb the ranks as a manufacturer,
Lenovo now
considers the UAE a central target.

It’s not hard to see why; Saudi Arabia and the UAE boast some of
the highest smartphone penetration rates in the world at 60% and
62% respectively,
according to Google, as of last year (and mobile internet rates
in the UAE may reach reach 73%,
which is on par with rates
in the developed world).

The smartphone market, like the Arab world on the whole, is
somewhat bifurcated. Gulf markets are naturally characterized by
hunger for higher-end models; in 2011, Blackberry had
51% of the market share in the UAE. This is quickly changing,
however; Android use is now
closer to 30% of smartphone market share in the UAE, and this
May, Blackberry and Samsung were
neck and neck in the UAE mobile market.

Android dominates these markets, estimated to be 37% in
Jordan, with a 40%
market share across the region, followed by iOS (35%),
Blackberry (15%), and Windows Phone (10%).

This may go without saying, but as networks improve across the
region, more and more users will be coming online for the first
time on their mobile phones, especially low-cost Android phones.
Smartphone use may overtake feature phone use in the Middle East
as soon as 2016.

2) develop a mobile-focused startup that caters to the masses
with a simple solution for a universal problem. Ideally, this
solution would involve a transaction; solving a simple daily issue
while charging a small fee will allow a startup to easily monetize
as it rides the trend.

Why a transactional model? Businesses that take a percentage of
each transaction can guarantee revenue, rather than depending upon
advertising, which is notoriously cheap in the Arab world.

Now carriers need to follow suit and ensure that users have
affordable plans to help bring the next wave of users online. And
governments need to create the right regulatory environment to
enable telecommunications (we’re looking at you,
Algeria).